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One thing that gets overlooked is that a large percentage of underwater homeowners seems to lead to prices rising, not falling, because inventory dries up. People can't sell so they stay put.
People can't sell so they stay put.
What if they want or need to sell for a job change or economic reasons but are underwater... Should they short-sell and trash their credit for a job change??
What are these job opportunites you speak of? If you are getting a better job offer somewhere you are in the minority and probably not underwater to begin with.
I have a old co-worker who bought a 2 bedroom condo in 2006 in Los Angeles area for $480k... Its worth about $350k now... He's prob not underwater cause he made a large downpayment... But he's stubborn and refuses to sell until he can atleast break even. Even though his original plan was to move up to a house by now. He's freelancing now so its probably harder to qualify for a new mortgage anyway.
This is a comparative price, NOT a median. Comps ARE important for price determination ... Medians are not.
Both do not tell you anything predictive about market health, bubbles, future etc.
No... let me re-explain this in as simple of terms as possible. If you live in "X" area and you have a home to sell, then your agent would take a look at recent sales and given the median of those sales, suggest pricing accordingly. Understand what the term " Median" means: It means that the collective average pricing for a given asset is what can be used to determine an overall basis for value.Rew says
The exact middle between the highest and lowest sold house (Median) isn't very relevant in market prediction or health either. With a median it only takes 1 very low or high priced house to skew the middle. (That actually seems worse!)
Then you must be much, much smarter than all of the economists and banking industry folks who use medians as a predicting factor.
You think the the gas attacks in Libya were because of Zionists. I ask for evidence and the first "proof" you give is that your father was Jewish. I wonder what a psychologist would have to say about that. All that is going wrong in the world is because of my dad!
Companies go out of business, go bankrupt, or restructure all the time, and yet lo and behold, the U.S. economy still exists. Where's Pan Am? Where's AMC? How does the U.S. continue to exist without those jobs?
Those events didn't occur within the confines of an economic crisis, did they?
Everything that was done has to be viewed in the context of how much the system could withstand at that moment.
I'm no fan of Bush and Hank, but I do believe them when they rejected their free-market ideologies and did what they did, knowing that it would cost them the support of ideologues who believe in "the free market" as a God.
The truth is, we are all interdependent. I wouldn't advise stressing a patient on life support by throwing in unnecessary surgery. The system was in dire shape and is still recovering today.
There were no buyers for a large auto manufacturing firm. There was no great company that would have swooped in to save the day. It would have been more costly and foolish to let a large employer collapse at that juncture.
They did go into bankruptcy, but an orderly one. Are you advocating for a disorderly one?
If the issue was a loss of aggregate demand, wouldn't it have even made sense to INCREASE government employment, rather than austerity? There are avenues in place to get people working easily, who then are consumers, who then shop and pay bills which improves the entire economy.
If the problem is employment and demand, then hire and pay consumers.
You think the the gas attacks in Libya were because of Zionists.
What gas attacks in Libya? Did you mean Syria?
People can't sell so they stay put.
What if they want or need to sell for a job change or economic reasons but are underwater... Should they short-sell and trash their credit for a job change??
The inability to move due to underwater mortgages is a hidden yet enormous drain on the economy
There were no buyers for a large auto manufacturing firm. There was no great company that would have swooped in to save the day. It would have been more costly and foolish to let a large employer collapse at that juncture.
There are no large auto manufacturing firms. In today's world auto makers are assemblers of parts from subcontractors. If GM went under the other auto makers would increase production. Gm suppliers would become honda, toyota, etc. suppliers (not too had since many already are). Gm dealers would become honda,toyota, etc. dealers (not too hard since most already are).
Gm only has 91,000 employees for christ sakes. IObama claimed to be saving "millions of jobs". If the bailout only cost 10 billion (it cost a lot more than that, there's a 45 billion waiver on future gm taxes for a start) to the taxpayers that's still a hell of a lot of money per job.
http://www.nationalreview.com/articles/300075/obama-and-gm-cook-books-john-lott-jr
People can't sell so they stay put.
What if they want or need to sell for a job change or economic reasons but are underwater... Should they short-sell and trash their credit for a job change??
The inability to move due to underwater mortgages is a hidden yet enormous drain on the economy
Means to revertion....
What's a "twit" ? What's an "assclown" ? Do intelligent people talk like this?
I wonder what the Court of Public Opinion will convict him of next...
Depends on what f-d up thing he does next. Most people(other than apparently you) don't like people that continuously act like douchebags. Or 'men' that abuse women.
What if they want or need to sell for a job change or economic reasons but are underwater... Should they short-sell and trash their credit for a job change??
It's up to them, obviously. But, my point is that the last year has shown that historically high levels of underwater homeowners has, if anything, been a positive indicator for housing prices.
Right... The volume of sales the underwater owners have caused this year has been outstanding....
Seriously? Did my point fly completely over your head?
The volume of sales has been low. Because fewer people have been moving... which is EXACTLY my point.
Are prices the only thing that matters, or is the ability for more people to buy up to their next house or move for better opportunities better??
That's a personal opinion. I'm not saying one is better than the other, just that underwater homeowners appears to a contributing cause for price increases.
Um, I read your comment and quoted it twice. I made no mistake
You read it. You just didn't comprehend it.
Yes it is, which is why if CL argues that the bailout was necessary to preserve demand, and you chime in and ALSO say that saving jobs preserves demand, then yeah, it sounds a bit like you're arguing in favor of the bailout.
Well not exactly. You chimed in that GM staying in business doesn't increase demand. So I posted that while it didn't increase demand, it stopped demand from falling. Because it appeared you were trying to nitpick CL's point.
Nice. Page one of the troll playbook, I believe.
Nope-I believe page one is insulting the poster rather than actually commenting on the discussion at hand.
With a little plastic surgery, Larry Elison would look exactly like Billy Drago, and can stand on the prow snarling and spitting chewing tobacco cuds.
I would like spinning blades, like Messala's chariot in Ben Hur, raked across the hulls of the competitors.
Larry can air lift hundreds of Great White sharks from his personal islands, the losers will chum the waters bobbing and screaming. Their first born will be sacrificed on a stone alter onshore.
Now, that would be a REAL race.
But it seems you're all about price increases only, even with low sales volume. Why is that?? Why aren't higher sales volumes better for the economy??
I don't know-why do you think higher sales volumes are better? Better for real estate agents I guess, but otherwise what's good about a lot of people moving?
Is it just me, or does it seem like every time the Ministry of Official propaganda releases positive housing news, an Study comes along and points a Cheetos stained finger at Obama and yells "YOU LIE!!!!!!!!!!!!!!!!!!!!!!!!!!!!"
Trickie Dickie phoned from the grave and said to thank Obama, historians, and political humorists will give him a break now.
6.4 Million U.S. Homeowners Still Have Underwater Mortgages
18.5 Million houses are vacant all year round.
6.4M + 18.5M = 24.9 million distressed properties
There are only 150 million households in the U.S. 17% are distressed. Exactly what is propping up the housing market?
Anyone want to take a guess of the direction of the housing "recovery"??
Right you are !
There are only 150 million households in the U.S. 17% are distressed. Exactly what is propping up the housing market?
Nope. Those 1500 million+ Asian millionaires are poised to push the US home prices to a record high.
I won't give you any hints, but think about that for a minute.....
I did. What do you think is good about a lot of people moving? Do you believe that there are a lot of jobs going unfilled because people can't move?
found not guilty in court,
So was O.J.
George Zimmerman is O.J. for white conservative people. That's why this case has been so controversial and such a political hot potato.
I firmly believe that O.J. and Zimmerman are equally innocent. Take that as you will.
APOCALYPSEFUCKisShostikovitch says
Imagine what this would add to ocean racing.
I think the rewrite of the Deed of Cup should include an unlimited snipers rule that assigns unlimited indemnity to teams to deploy offensive snipers on their boats
Hunger Game Cup
That's a personal opinion. I'm not saying one is better than the other, just that underwater homeowners appears to a contributing cause for price increases.
Underwater homeowners might be a small contributor... The higher contributors were lower mortgage rates and investors snapping up decent inventory for cash, taking average homeowners out of the picture...
But it seems you're all about price increases only, even with low sales volume. Why is that?? Why aren't higher sales volumes better for the economy??
You are both right
the underwater homeowners keep inventory back from the market causing higher prices AND the reason they are underwater in the first place is artificially low interest rates!
Those rates are even lower now causing prices to rise even more than they other wise would.
These two posts still hold:
http://smaulgld.com/the-dark-side-of-rising-home-prices/
http://smaulgld.com/real-estates-underwaterdown-side-sticky-catch-22/
Better for real estate agents I guess, but otherwise what's good about a lot of people moving?
I won't give you any hints, but think about that for a minute.....
People moving per se is not good or bad. People being ABLE to move and moving for economic reasons is a good thing.
People not being able to move because of their house is not good
As anyone who has been with any women knows, you often pay one way or another for their delights.
Face it: that broad was pretty hot in those bikini pics! So he was having that? Well, sometimes they make a big scene when you break up.
Zimmerman's crime: he's a dimwit. You wanna break up with a female? Quietly you remove your valuables without her knowledge FIRST.
Then you "Just sneak out the back, Jack."
Never meet with her again unless in a public starbucks, etc. where she can't make a huge scene.
Dan above you're wrong, O.J. had a long history of abusing his wife and kids.
Yeah those underwater are stuck for sure.
"Your reach exceeds your grasp" Sucker.
Oh well it's a shame.
"Sooner or later it all ends in tears..." Layer Cake.
Housing affordability will keep falling as the salesmen keep calling it a "housing recovery".
Do people move up because their families have grown and they need a bigger house?? Do seniors move because they want to downsize their big house and move into something smaller?? Do people move to be closer to their families?
People move for a lot of reasons--some good, some bad.
When someone moves and buys a house, how many people earn dollars from that transaction. Think about that.... What type of economic input does a house sale produce from everyone involved in that transaction?
But there is no net gain to the economy. Is paying realtors a good thing? Paying transaction costs to the bank--that's a good thing??
See, it's not about "price increases", but "volume"!! Volume adds a lot more to the economy than higher prices will....
I see very little gain.
What about paying home inspectors, surveyors, termite inspections, appraisers, mortgage loan brokers, movers, title company, attorneys, tradesmen not to mention what gets spent by upgrades to the new house: carpet, paint, appliances, blinds, furniture, cabinets, bathrooms, etc. Not to mention all the trips to the home improvement store, etc. There's probably a bunch I'm still missing...
Still think there's no "net gain" to the economy when someone moves??
I'm surprised at your response. You almost sound like a Keynesian!
There would be no end of desperately poor people lining up to take their shot at the assholes who not only destroyed any shot they had at a better life but convinced them it was their fault.
I dunno: killing the job craters with 50-cal. sniper rifles would increase their security costs, which they would just pass on to us in the form of higher prices for goods and services.
Plus: if there are no job craters, nobody will ever have jobs again!
Do you really think the "job craters" would need the excuse of more security to raise prices? Prices are ALWAYS set at the maximum the market can bear.
That's just basic capitalism.
Police malpractice.
No one wants these people living near our schools; it's no secret what they're capable of. The NSA should review all phone and internet activity - as well as in-home surveillance video - of any person whose profile suggests even a latent intent to sell real estate.
How many times must we cover this same ground?!
The truth is....no one cares for the Walmart workers. They don't give a rat's ass for them. People only care for themselves. Anyone who claims otherwise is lying.
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